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Fundamental analysis: Archer-Daniels-Midland Company (ADM)

Awarener score: 6.1

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Good) and growth (Average), and the company's inclination to return cash to the stockholders (Good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.5

  • Business has been growing at a low pace. It's been encouraging in relation to peer companies.
  • Archer-Daniels-Midland Company business trend stability is good. The higher the stability, the lower the risk. It looks somewhat better than rivals.

Margins score: 5.0

  • ADM profit margins -on goods and services sold- are usually extremely poor. They stand mediocre against rival companies.
  • Business profit on sales tends to be sufficient. It's similar to competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually hardly sufficient. They remain close to average when compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still slightly better than similar companies.
  • Profits -before income taxes- are usually sufficient considering total sales, and remain similar to rivals.
  • Total net profit tends to be sufficient when confronted to sales. Company stands similar to comparable firms.

Growth score: 6.3

  • Archer-Daniels-Midland Company profit -on goods and services sold- has been growing at a good pace. It's been close to average when compared to competitors.
  • In recent years, earnings -on operations- have been growing at a normal step, which has been slightly worse than comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a normal pace, which compares almost average when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a good tempo. It turns to be lacking compared to similar stocks.
  • In past years, profits -before income taxes- grew at a good speed. It was somewhat worse than rivals.
  • In the previous years, growth on total net profit has been low, and below average when measured against peer companies.
  • Earnings per share have grown at a normal rhythm in past years. It's been lacking compared to industry peers.

Miscellaneous score: 8.0

  • ADM managed to pay little to no income taxes on profits made in the past years. It's been better than most peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 7.2

  • Archer-Daniels-Midland Company usually gets very good returns on the resources it controls. It proves encouraging in relation to peer firms.
  • The company normally gets good proceeds -on the resources directly invested in the business-. They remain a slight improvement compared to similar companies.
  • Profitability -in relation to owned resources- is usually quite good. It ranks more than average in relation to competitors.
  • In the past, got good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's encouraging in relation to comparable enterprises.

Usage of Funds score: 3.7

  • ADM on average doesn't generate genuine funds, so to buy or replace property, plants and equipment must either burn existing cash or increase debt. It stands encouraging in relation to rival firms.
  • The company is usually replacing the property, plant, and equipment that gets old, keeping its operating capabilities up to date, which is weak when measured against industry peers.
  • In the past twelve months it paid run-of-the-mill dividends, considering the current stock price. It came mediocre against competitors.
  • In recent years, has slightly cut back dividend payments. The company has behaved lacking compared to similar firms.
  • The company generates very few genuine funds. Dividend payments are usually on borrowed money, which isn't sustainable in the long run. Unless business prospects improve greatly, future payments could be at risk. Sustainability looks bottom tier against comparable companies.
  • The company usually neither enlarges nor reduces the pool of investors, resulting in approximately the same mouths feeding on the pie of profits. It remains rather normal in relation to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in a weak position compared to rivals.
  • We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 5.8

  • Archer-Daniels-Midland Company intangible assets (like brands and goodwill) represent a modest portion of resources controlled, according to accounting books. There could be some difficulties in liquidating them if the company ever gets in financial distress. It happens to be below average when measured against peer companies.
  • The company has more short-term resources than short-term obligations. Liquidity concerns shouldn't be an issue. It turns to be in a very weak position compared to similar firms.
  • Roughly a quarter of resources controlled were provided for with financial debt. Creditors have some claims on the company. It remains slightly better than rival firms.
  • Most controlled resources can be made into cash reasonably quick, which is good for liquidity and risk. It looks encouraging in relation to rivals.
  • For every dollar of short-term obligations, the company has less than a dollar of cash and short-term receivables. It's in a very weak position compared to peer firms.
  • For every dollar of short-term obligations, the company has roughly half of cash and equivalents, which is worse than most similar enterprises.
  • Usually, sales are on less than a month credit. It still ranks similar to peers.
  • Normally has approximately somewhat more than two months of sales worth in inventory. It comes up as lacking compared to competitors.
  • On average, it takes higher than three months from the purchase to charging customers. It happens to be somewhat worse than peers.
  • On average pays suppliers before a month from the purchase. It ranks substantially worse when measured against industry peers.
  • The company pays its suppliers roughly two months before charging its customers, so there's some money invested in working capital. It's lacking compared to similar companies.
  • Net interest expenses consume a minor portion of usual business earnings, and are easily bearable. It stands slightly better than rival firms.
  • Business earnings have usually been quite good when measured against loans taken. Cutting back reinvesting in the business, it could take around three years to repay the obligations with current profitability. It ranks almost average when measured against comparable enterprises.
  • Revenues are very good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements allows the company to keep more money to reward stockholders in the long run. It looks excellent in relation to similar firms.
  • Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still somewhat better than peer companies.

Valuation score: 6.1

  • Archer-Daniels-Midland Company looks reasonable in relation to profits and financial position. It happens to be similar to competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
  • In the past twelve months, the company consumed funds. Either it reinvested in the business or genuine fund generation might be challenging, which stands top-notch against similar companies.
  • The company usually consumes more funds than can genuinely generate. Business needs are meet by borrowing money or consuming preexistent cash, which can only keep up until a certain limit. Unless the company is driving business growth, genuine profitability may be brought into question. It's still almost average when measured against industry firms.
  • In the past twelve months, the company has barely rewarded investors, considering both dividends and share on the pie of earnings. It came up close to average when compared to peer ventures.
  • The company has barely more debt than cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks slightly worse than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks similar to peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a low relationship. One common cause includes profitability being poor. It looks in good shape compared to rival firms.
  • The relation between the stock price and accounting book value is somewhat high. It's important both to check this metric through time and to compare it with rival companies. The company remains mediocre against peer firms.
  • In the past twelve months, the operating business earned good money when compared to the current stock price and financial position. It happens to be similar to industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a very good earnings power ability when measured against the current stock price and financial position. It's still in good shape compared to peer companies.

Total score: 6.1


ADM logos

Company at a glance: Archer-Daniels-Midland Company (ADM)

Sector, industry: Consumer Defensive, Farm Products

Market Cap: 48.36 billions

Revenues TTM: 94.36 billions

Archer-Daniels-Midland Company procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients in the United States, Switzerland, Cayman Islands, Brazil, Mexico, the United Kingdom, and internationally. The company operates through three segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. It procures, stores, cleans, and transports agricultural raw materials, such as oilseeds, corn, wheat, milo, oats, and barley. The company also engages in the agricultural commodity and feed product import, export, and distribution; and structured trade finance activities. In addition, it offers vegetable oils and protein meals; ingredients for the food, feed, energy, and industrial customers; crude vegetable oils, salad oils, margarine, shortening, and other food products; and partially refined oils to produce biodiesel and glycols for use in chemicals, paints, and other industrial products. Further, the company provides peanuts, peanut-derived ingredients, and cotton cellulose pulp; sweeteners, corn and wheat starches, syrup, glucose, wheat flour, and dextrose; alcohol and other food and animal feed ingredients; ethyl alcohol and ethanol; corn gluten feed and meal; distillers' grains; and citric acids. Additionally, the company provides natural flavors, flavor systems, natural colors, proteins, emulsifiers, soluble fiber, polyols, hydrocolloids, and natural health and nutrition products, including probiotics, prebiotics, enzymes, and botanical extracts; and other specialty food and feed ingredients; edible beans; formula feeds, and animal health and nutrition products; and contract and private label pet treats and foods. It also offers futures commission merchant; commodity brokerage services; cash margins and securities pledged to commodity exchange clearinghouses; and cash pledged as security under certain insurance arrangements. The company was founded in 1902 and is headquartered in Chicago, Illinois.

Awarener score: 6.1

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Good) and growth (Average), and the company's inclination to return cash to the stockholders (Good).